The Central Bank of Nigeria (CBN) has reported a decrease in the demand for foreign exchange for oil imports due to subsidy removal and international oil market fluctuations. This update was provided by CBN economist and Principal Manager, Osagie Clement, at a hearing with a House of Representatives committee investigating a recent fuel price increase.
Clement explained that the demand has declined to 20% from 35%, translating to a reduction in forex commitment for fuel imports from $150 million. He noted that the CBN has minimal influence on the Dollar exchange rate, which affects the local price of Petroleum Motor Spirit (PMS).
He clarified that importers use the CBN rate as a guide, but actual rates differ in the open exchange market. Despite this, the CBN still commits $150 million to support PMS imports.
Clement expressed optimism that the current forex measures would yield positive results in the next four months and urged the House to convince the federal government to encourage local production by discouraging imports of goods that can be made in Nigeria.
Ogbugo Ukoha, Executive Director of the Nigeria Midstream and Downstream Petroleum Regulatory Agency’s distribution systems, asserted that market forces set petroleum product prices. He added that the Petroleum Industry Act empowers regulators to prevent monopoly cartels and curb illegal profiteering.
The committee’s chairman, Babajimi Benson, called for government agencies to protect Nigerians as the government implements policies to improve the country. He reassured that the National Assembly, especially the House of Representatives, would enforce laws and implement policies to relieve Nigerians.